Say I decide to become a software developer contractor and open a corporation. So, I am allowed to write certain things off as corporation expenses (e.g restaurant bills, gasoline bills, etc.)
Then, a company hires me full time, but I decide to keep the corporation. Would it then be illegal to write off my restaurant bills? Because I can still claim to be employed by my corporation, so I think it is legal.
No, your business cannot deduct your non-business expenses. You can only deduct from your business income those reasonable expenses you paid in order to earn income for the business.
Moreover, for there to be a tax benefit, your business generally has to have income (but I expect there are exceptions; HST input tax credits come to mind.)
The employment income from your full-time job wouldn't count as business income for your corporation. The corporation has nothing to do with that income – it's earned personally, by you.
With respect to restaurant bills: These fall under a category known as "meals & entertainment". Even if the expense can be considered reasonable and business-related (e.g. meeting customers or vendors) the Canada Revenue Agency decided that a business can only deduct half of those kinds of expenses for tax purposes.
With respect to gasoline bills: You would need to keep a mileage and expense log. Only the portion of your automobile expenses that relate to the business can be deducted. Driving to and from your full-time job doesn't count.
Of course, I'm not a tax professional. If you're going to have a corporation or side-business, you ought to consult with a tax professional.
(A point on terminology: A business doesn't write off eligible business expenses — it deducts them from business income. Write off is an accounting term meaning to reduce the value of an asset to zero. e.g. If you damaged your car beyond repair, one could say "the car is a write-off.")
